Financial cliff

[jazyd]

Moody's is about to lower our credit rating.

a second recession is projected for next year if something isn't done quickly and it will be caused by the government.

unemployment is projected to possibly go back up to as high as 9.% which real unemployment would be around 17%

Senate will not negotiate, will not put forth a budget, will not pass a budget, will only play chicken.

No Obama in a leadership role, throws a stupid budget out in the spring that the entire senate defeated, not one democrat would vote for it.

No budget from the senate under REid in 3.5 years.

No leadership from Mitch McConnell of the republicans, house republicans leading the way

Obama is too busy campaigning to meet with Israel leader, what a snub

No word from obama tonight as our US Embassy in Egypt is overrun, our flag taken down, torn up and replaced with an Islamic black flag Our Libya consulate overrun, one killed. No word from our president.

Mick and I talked several months ago about a second recession, he said he started feeling things go south in May with his company as orderes were put on hold or canceled and payments being slow, late or fought over.

If you are in business as I am, and if things are better this year, don't get lulled into ordering heavy next year, could kill the goose.

If we do have a second recession, imo, it will be worse this time around mentally and there will be no trust from the American people.

IF it goes south, could trouble and or riots be in our future as those that are used to getting everythng free take to the streets or our houses to take what they feel is theirs?

I am counting on Citizen and dan to make me feel better.

[CitizenBBN]

Man, wish I could but on too many of those points you're preaching to the choir.

How Obama allows two locations of US soil to be attacked and leaves it to Hillary to make a statement is amazing to me.

I don't expect massive riot, but I do expect more unrest and I expect some groups to try to leverage that into even more government expansion and increasingly Leftist policies. The good news is those on the Right are becoming just as active and angry, and they won't go gentle into this good night.

Everyone complains about the lack of compromise in Washington, the extreme and non-negotiable policies of the two sides. Fair enough, but those guys didn't get elected promising compromise. they got elected promising to be non-negotiable on a set of issues.

We're the ones who don't want compromise, and the size of the gap is a reflection of the size of the gap in the electorate. That gap is growing. That's on us, not politicians.

Furthermore, I see no way to reconcile the two sides. I have no intention of compromising on my view that government should be reduced massively, that our direction should be free minds, free markets and free society, and at this point I see no reason to deviate on that course as I see no offer on the table that moves us that way while I give up some other thing. Nor do I expect any b/c the other side has a completely opposite direction they wish to pursue and I'm not going to make that offer to them either.

So the line in the sand is becoming a ditch. I'm not going to give up on free markets and limited government, they aren't going to give up on democratic socialism as practiced in the Western European model. I think it's going to come to a head in a battle for the nation.

In case we lose that's part of why I got into the firearm business after decades of not being active, and try to stick to investments that are heavy on downside survivability like my house (which if paid off is at least a roof over your head). I need to invest in some MREs though. Gonna feel stupid sitting in my house safe from the zombies but having to eat the wallpaper. lol.

I really don't think it will come to that, but there's that 1% in the back of my head watching Greece and Spain and saying "never say 'it can't happen here' to anything ever".

[BigBlueBrock]

Until this election is completed, it's difficult to say what will be done. I fully expect Obama to be reelected as Romney and Ryan are two of the most unlikable people on the planet. I wouldn't be surprised to see him push for a large stimulus aimed at rebuilding infrastructure very soon after the election has concluded, assuming he is in fact reelected. You may see another round of quantitative easing, as well, especially if we see consecutive poor jobs reports and dreadfully slow recovery.

Beyond that, there's really nothing we can do beyond wait this out.

[cattails]

Moody's is about to lower our credit rating.

a second recession is projected for next year if something isn't done quickly and it will be caused by the government.

unemployment is projected to possibly go back up to as high as 9.% which real unemployment would be around 17%

Senate will not negotiate, will not put forth a budget, will not pass a budget, will only play chicken.

No Obama in a leadership role, throws a stupid budget out in the spring that the entire senate defeated, not one democrat would vote for it.

No budget from the senate under REid in 3.5 years.

No leadership from Mitch McConnell of the republicans, house republicans leading the way

Obama is too busy campaigning to meet with Israel leader, what a snub

No word from obama tonight as our US Embassy in Egypt is overrun, our flag taken down, torn up and replaced with an Islamic black flag Our Libya consulate overrun, one killed. No word from our president.

Mick and I talked several months ago about a second recession, he said he started feeling things go south in May with his company as orderes were put on hold or canceled and payments being slow, late or fought over.

If you are in business as I am, and if things are better this year, don't get lulled into ordering heavy next year, could kill the goose.

If we do have a second recession, imo, it will be worse this time around mentally and there will be no trust from the American people.

IF it goes south, could trouble and or riots be in our future as those that are used to getting everythng free take to the streets or our houses to take what they feel is theirs?

I am counting on Citizen and dan to make me feel better.



Well "me buck co", the problem with what you posted is that I think the majority of it IMO is true. Unlike Chuck I think the riots will be something like we have never seen before. We are having one of our best years in some time but I keep telling the boys this is fools gold, don't expect it to last. I expect the bottom to just fall out, flat line if you will. And when it does we are in deep trouble and I don't know how to prepare for this either, I don't know how or who will be safe. I don't think recession is the right word for what is coming. If Obama wins the election you can put a few more holes in the sinking ship, Romney is our only hope and not so sure he can win. I see more and more doors closing day by day, it's comin bubba!!!

[jazyd]

Some more of those 'shovel ready job's' he promised first time around and then laughed and said well maybe they weren't so ready after all, when he should have been saying he gave the money to his buddies who helped elect his sorry ass.

two most unlikeable people on the planet, wow what a statement, that is really far off the planet even for a liberal. Where do you get crap like that?

Your liberal boy may win, and you better hope he doesn't unless you have a ton of cash put back somewhere because if he does, the economy is tanking and quick.



Until this election is completed, it's difficult to say what will be done. I fully expect Obama to be reelected as Romney and Ryan are two of the most unlikable people on the planet. I wouldn't be surprised to see him push for a large stimulus aimed at rebuilding infrastructure very soon after the election has concluded, assuming he is in fact reelected. You may see another round of quantitative easing, as well, especially if we see consecutive poor jobs reports and dreadfully slow recovery.

Beyond that, there's really nothing we can do beyond wait this out.

[jazyd]

Carl, I am nervous like you, made the decision this week that I won't let that fools gold get me, we will reduce our inventory for next year and try to build up some cash in the store until we see where it all shakes out. We have had a decent year so far but only based on the last two years, it still is way below 2009 and prior years.
And like citizen, part of that back part of the brain says there will be unrest, maybe not riots but there will be something from those that live off the government as they will look at us that provide the wealth and taxes and decide they are going to take what we have because Obama has taught them they deserve it and those of us that pay taxes aren't paying enough so they can have more cell phones, more HD tv's that are bigger than what I have, nicer cars, free housing, free food, free utilities, free medical, free after school care.

One laughs when we talk like this but let me tell you a story I was told on monday. The man who developed and runs my website is good friends with a family that owns several apt complexes that are rented by the government for welfare people to live in. The rent is free, utilites free, they all have cell phones, cars, tv's whatever. They have to pay the monthly garbage pickup fee, $5. He has had to evict people because they refused to pay $5 a month, and have called him every racist name in the book, even though he knew each one of them had the $5 in their pockets, or had bought booze, cigerattes, whatever. If anyone thinks that those same people won't try to come into my neighborhood or my house to get what they feel is theirs, you are wrong. They have been told by the democrats for years that they deserve it, Obama has increased people on foodstamps by 50% in 3.5 years, income has been lowered by almost 10% in that time period, our debt is trhu the roof, and if you pay attention to what he says, he wants to raise taxes, and not cut spending but increase spending which goes against the very thing we need to be doing.

He is a disaster on foreign affairs, his apologies to the middle east, and the way he handled the takeovers in Libya and Egypt , we are seeing the results of that today. Our president is supposed to be a leader, this one we have now, makes Carter look good.

[Catfan73]

Everything I read gives him very good grades on foreign affairs.

http://www.foreignpolicy.com/articles/2012/01/23/grading_obama_s_foreign_policy?page=0,0&hidecomments=yes

http://www.foreignaffairs.com/articles/137516/martin-indyk-kenneth-lieberthal-and-michael-e-ohanlon/scoring-obamas-foreign-policy#

[Doc]

Moody's is about to lower our credit rating.


is this a BBT thread????

As for it being caused by the gov't, the last one was caused by the gov't too, and not just the "failed policies of George Bush". The financial policies of the gov't for years have been messed up and the stupidity of what they do is mindboggling. Of course the reason they do it is obvious (spend money on me and you get my vote) however we should expect them to spend responsibly and they (congress and the gov't in whole) has failed miserably. Add the gov't created housing bubble where they basically forced banks to loan to those who could not afford homes, then they have the balls to blame the financial institutions for implementing the policies the congress created.

Also, there is not SECOND recession because the first one never ended. Economist shenomomists! I don't give a crap what the statistics say. Stats can say whatever you want the to say. I don't for a minute believe that we were ever coming out of any recession.

[Doc]

Man, wish I could but on too many of those points you're preaching to the choir.

How Obama allows two locations of US soil to be attacked and leaves it to Hillary to make a statement is amazing to me.

I don't expect massive riot, but I do expect more unrest and I expect some groups to try to leverage that into even more government expansion and increasingly Leftist policies. The good news is those on the Right are becoming just as active and angry, and they won't go gentle into this good night.

Everyone complains about the lack of compromise in Washington, the extreme and non-negotiable policies of the two sides. Fair enough, but those guys didn't get elected promising compromise. they got elected promising to be non-negotiable on a set of issues.

We're the ones who don't want compromise, and the size of the gap is a reflection of the size of the gap in the electorate. That gap is growing. That's on us, not politicians.

Furthermore, I see no way to reconcile the two sides. I have no intention of compromising on my view that government should be reduced massively, that our direction should be free minds, free markets and free society, and at this point I see no reason to deviate on that course as I see no offer on the table that moves us that way while I give up some other thing. Nor do I expect any b/c the other side has a completely opposite direction they wish to pursue and I'm not going to make that offer to them either.

So the line in the sand is becoming a ditch. I'm not going to give up on free markets and limited government, they aren't going to give up on democratic socialism as practiced in the Western European model. I think it's going to come to a head in a battle for the nation.

In case we lose that's part of why I got into the firearm business after decades of not being active, and try to stick to investments that are heavy on downside survivability like my house (which if paid off is at least a roof over your head). I need to invest in some MREs though. Gonna feel stupid sitting in my house safe from the zombies but having to eat the wallpaper. lol.

I really don't think it will come to that, but there's that 1% in the back of my head watching Greece and Spain and saying "never say 'it can't happen here' to anything ever".


Damn straight....I voted for folks that said they would put an end to the spending habits in Washington and I expect them to not waver on that. Compromise isn't the same as caving. I didn't elect obstructionist however if that is what it takes, so be it. IMO there is nothing wrong with failing to compromise so something doesn't pass because not everything congress does is good.

[ukblue]

If Obama wins reelection unemployment will go to 12% imo. Right now people won't borrow money or hire new people because they don't know from one day to the next what Obama is going to do. If Romney wins obamacare will be repealed or at the least redone
to stop the largest taxhike in history.

[BigBlueBrock]

Romney won't repeal Obamacare. The ACA is a Republican piece of legislation to begin with that is only opposed by the GOP because a Democratic president passed it. The Heritage Foundation, a right-wing organization, is the originator of the core ideas of the ACA. Ideas that Romney himself used for the healthcare mandate he passed as governor of Massachusetts.

[ukblue]

I don't disagree with you BBB on the biggest part of your post. Romney would not be my 1st pick as a president because of his record as a governor. I do think a republican congress would make changes in the law with a virtually zero chance of repeal.

[BigBlueBrock]

A Republican Congress would have passed a practically identical version of the bill when Clinton was president if they'd been able to. The ACA is here to stay.

[jazyd]

I agree with both of you. When I was much younger compromise was ok because you had two good sides working for the betterment of the country. Now you have democrats who have no balls, no backbone, who will ruin this country, take away more and more of my freedoms, who will not prosecute new black panters who openly threatened white voters, who openly gave arms to criminals in Mexico, we have a rouge dept of justice, a weakling for a president, a state dept that doesn't know it has balls between its legs, a senate leader who is the very worst majority leader of the senate of all times who is probably dumber than dirt.

And doc you are correct in that employers are not going to hire more people, turn money loose until they know who wins. Obama wins, everything tightens up quickly, unemployment jumps, taxes go up, spending goes up, debt goes up, credit rating goes down,
And one really good kicker that came out this morning from this idiotic adminstration, while Obama lies about medicare and the Ryan budget, his own adminsitration is going to do an experiment with senior adults. Those that are duel enrolled in medicare and medicaid will be put in HMO's...that is insurance run programs, that is voucher...in 18 states, 2 million experiment adults. They say they can opt out in a certain amount of time, except most of those 'experiments' have cognitive problems meaning they won't know what is going on anyway and can't make decisions like that. So we will have government paid HMO's that will overcharge the government like everyone does, fraud will be rampant, and those poor people will get horrible service and care while the owners of those HMO's line their pockets and give mightily to the DNC and Obama.

Carlos, this is a fine mess we have gotten ourselves into.



Damn straight....I voted for folks that said they would put an end to the spending habits in Washington and I expect them to not waver on that. Compromise isn't the same as caving. I didn't elect obstructionist however if that is what it takes, so be it. IMO there is nothing wrong with failing to compromise so something doesn't pass because not everything congress does is good.

[CitizenBBN]

Everything I read gives him very good grades on foreign affairs.

http://www.foreignpolicy.com/articles/2012/01/23/grading_obama_s_foreign_policy?page=0,0&hidecomments=yes

http://www.foreignaffairs.com/articles/137516/martin-indyk-kenneth-lieberthal-and-michael-e-ohanlon/scoring-obamas-foreign-policy#

The first link points out what will probably end up being his biggest well defined failure: the pullout in Iraq. Yet again the US has marched in, killed the bad guys and left the country in the hand of other bad guys or at the mercy of them. No doubt a difficult situation, and in part a problem he inherited, his solution was basically to do nothing. The path of least political resistance was to pull out completely. Even that article points out it could be a disaster of significant proportions.

It left out another festering nightmare with Pakistan. I support what we did to get Bin Laden but the US has since the Soviet pullout of Afghanistan tried to put one foot in bed with the militarists in Pakistan and one foot out b/c we don't like their human rights policies and their nuclear weapons program. The result has been we aren't liked by anybody there very much and our support is eroding badly. Apparently the solution here again is to pull back from Afghanistan. This will most surely leave the region in the same basic mess we found it in, and will quickly become a safe haven for our enemies in the Islamist movement.

Again, not an easy answer, but he has chosen the existential solution - do nothing different than follow the path of least resistance.

They point to a new base in Australia. That's great, but then he supports the Small Arms Treaty that has language that could be interpreted as arms sales to Taiwan being illegal b/c they are not a UN member.

North Korea is a very difficult situation but nothing has been done there by much of anyone from Clinton to today. They are a true disaster waiting to happen. I won't hold that against him a whole lot, but it is one of the biggest issues facing us and he hasn't really done anything with it either.

What I really see, and this is in the link you gave, is a President reacting more than pro-acting. With the fall of the Cold War the US has been found without a paradigm, and I have yet to see this President try to establish one. Bush II had one, one with which many disagreed, but the neo-conservative approach of military pro-action is at least an attempt to define our approach for the next decades.

What Obama has done is introduce a view of a scaled down military. that is the LAST thing we need at a time with the Cold War over b/c now a simple negotiation with the Soviets won't stabilize a situation. The Islamist movement is a function of the fall of repressive regimes in that region, many backed by the USSR. With their fall came the lack of economic and military aid and arms to nations like Syria and Libya as well as lack of positive control over Pakistan by the US due to the lack of threat from the Soviets through Afghanistan.

When the Wall fell everyone talked about the "peace dividend", not understanding that the Cold War WAS the peace. Now all these lunatics are puppets without strings. We can't control ours b/c the Soviet's satellites aren't the threat they were without Soviet backing and of course their satellites have no control at all.

Obama's cutting of the military is insane in this environment. I have no desire to be the world's policeman, but any future conflicts or military actions will be conventional, and conventional weaponry and infrastructure costs more than nuclear infrastructure. Defending ourselves just got more expensive not less. Unless we decide to start cutting some commitments in places like South Korea, or at least sending them the bill.

Obama hasn't done that either, so instead we have 30K troops throwing rocks in South Korea as a deterrent to NK and we're cutting our force projection in regions that are active.

Now, that's not to say any fool would do it right. I don't know if Romney would do it right, but I know Obama hasn't done anything really positive in foreign policy. Nothing proactive, just reactive and very measured. He turns the ship into the storms as they come, but he isn't steering to a particular port.



(PS - that article mentions another big mistake - trading off ABM and other defense of Poland for support on Iran, support the Russians will all but ignore. So we got little if anything for it, and we are missing a major opportunity to expand our involvement with Eastern Europe, and have done so since the fall of the Wall. These nations are largely pro US yet we trade off their defense for UN nonsense that means nothing)

[jazyd]

Citizen, what you just wrote defines Obama as a senator, do nothing so it can never be held against you. How often did he not vote, or vote present. That is his nature, do nothing but react when one must.
Clinton must really want his wife as President so badly he will go against everything he believes to be on the side of Obama. I guarantee Clinton is working behind the scenes to get control of the democrat party once again, he just showed they are weak w/o him and need him to win. he is piling up return favors in his pocket.
But again the foreign policy of Obama is a disaster and it is now showing. They claimed just a few weeks ago that AQ was all but dead thanks to their wonderful efforts, well ole AQ showed them this week they are far from dead nor are they afraid of this president or our present country. We have seen no action by the Egyptian or Libyan presidents to stop what is going on nor words from either of them apologizing or using force to drive back protesters. Only Yemen president has apologized for the actions of protesters in his country.
The arab spring has turned into a disaster for this country. While the dictators of those two countries were ruthless indidividauls, they did keep everything in check. Egypt had a good relationship with Israel, Libya was scared to death of the US Airforce. Now we have the Muslim Brotherhood in control, and the name of their organization tells us all we need to know. This is not a friend of the US organization.
And this so called great foreign policy president won't even meet witht he president of Israel for a few moments as he is too busy to step back from his campaign and air time on David Letterman to meet with an ally that needs our help badly right now. As strong as Israel is, if all those countries over there decided to go against them at one time they cannot win that war. Iran is controlling this whole mess over there, now working with Iraq, Syria, Hamas, more than likely Egypt, and Libya and stirring up things in other countries as well. it is a total mess and all Obama aworries about is going to Vegas for another fundraiser and getting his jokes ready for Letterman. No staying in the WH to watch over things, heck the idiot even misses over half of the intelligence briefings every morning, instead using a surragate to get the message and bring it to him wheever he is doing a fundraiser or playing golf or basketball. Think about that for one second, he misses over half the intelligence briefings each day. His main job as president is to keep us safe and he misses meetings. Is there any wonder that there are major leaks about our intelligence.

I just cannot understand how people who are supposedly intelligent can actually vote for this moron. He has no backbone as a president, he surrounds himself with people from the academia world who think as stupidly as he does and have no experience, his economic policies are a disaster, we are at a financial cliff and he does nothing, does not meet with congress, does not demand cuts and only speaks of spending, he divides the country along every line possible, he believes he is a stud athlete. When you see who his mentors were while growing up and thru college you get the perfect idea of who he is and it should scare one, but there are too many out there intent on destroying the true America and turning it into a welfare state that totally depends on government help with only the select few making all the money and decisions for all us peons.

[Catfan73]

This thread just reminded me of an old political axiom--the optimistic candidate almost always wins the election, right or wrong. The Republican party right now is anything but optimistic. I think it may be partly the fault of the Tea Party's recent influence, but everything coming from the right seems to be anger and nostalgia for what they view as the good old days. The ability to change what we as a society deem to be necessary however is a part of what makes America the great nation it is.

Sometimes I take such a broad view of things that I miss the trees for the forest, so I have no doubt that a great many things that Jazy said in his first post are true. I also believe that if the Romney camp can't tone down the hateful rhetoric and find some optimism somehow and show voters that they love America, they don't stand much of a chance of winning in November.

[jazyd]

Have you paid attentionn to the hate from the left? Romney is a felon, a racist, a tax dodger, a liar, a Nazi, shall I continue. The left is the one with the hate



This thread just reminded me of an old political axiom--the optimistic candidate almost always wins the election, right or wrong. The Republican party right now is anything but optimistic. I think it may be partly the fault of the Tea Party's recent influence, but everything coming from the right seems to be anger and nostalgia for what they view as the good old days. The ability to change what we as a society deem to be necessary however is a part of what makes America the great nation it is.

Sometimes I take such a broad view of things that I miss the trees for the forest, so I have no doubt that a great many things that Jazy said in his first post are true. I also believe that if the Romney camp can't tone down the hateful rhetoric and find some optimism somehow and show voters that they love America, they don't stand much of a chance of winning in November.

[Doc]

Have you paid attentionn to the hate from the left? Romney is a felon, a racist, a tax dodger, a liar, a Nazi, shall I continue. The left is the one with the hate

you forgot homophobe, geriophobe and misogynist

[kencat]

More "funny money" to the rescue. This proves it, Bernanke is in the tanke for Obama.

The Fed said Thursday it would buy $40 billion a month in mortgage-backed securities until the outlook for the labor market improves substantially.

L.A. Times (http://www.latimes.com/business/money/la-fi-mo-bernanke-federal-reserve-stimulus-news-conference-20120913,0,3870508.story)

[Catfan73]

Isn't this sort of thing what the Fed is supposed to do? For the last 100 years, it's made America the envy of the world with constant, stable economic growth. Or is this one of those situations where it would be better to not do something beneficial for the country because it might help Obama get reelected?

[kencat]

Isn't this sort of thing what the Fed is supposed to do? For the last 100 years, it's made America the envy of the world with constant, stable economic growth. Or is this one of those situations where it would be better to not do something beneficial for the country because it might help Obama get reelected?

This Country hasn't been in such dire economic circumstances since the depression. The FED's job is to control the money supply, not flood the market with phony capital. I don't claim to be a economist, but even I can understand that printing money thats not worth the paper is printed on, just to prop up a failed economic policy seems to be a recipe for a inflation explosion. I believe that loaning money to people who couldn't afford to pay it back is what got us into this mess in the first place

[CitizenBBN]

Isn't this sort of thing what the Fed is supposed to do? For the last 100 years, it's made America the envy of the world with constant, stable economic growth. Or is this one of those situations where it would be better to not do something beneficial for the country because it might help Obama get reelected?

To the first part the answer is no. The Fed was never chartered to purchase mortages in order to prop up the housing market. That started in 2008 with the economic downturn but it has been hotly contested if it is within the Fed's mission or charter.

The problem is it takes securities that the market has deemed of low quality and high risk, which we can all agree on I think given the housing situation, and rolls them directly into the federal balance sheet and right into the nation's bank. The only reason it can do this is it is the only bank that can, through the machinations of the government of course, effectively print its own money.

Now for the 100 years of constant, stable growth. The Fed has been successful overall, but that's why this purchase of mortgages is so disconcerting. Heretofore the Fed has implemented monetary policy through what is called "open market operations", i.e. the purchase and issue of Treasury Bills (T-Bills). That impacts the Fed Funds rate and essentially controls the amount of money (liquidity) in the system.

That is a pure monetary policy. They control the liquidity of the market, the supply of money, and that is part of what manages the economy.

This is wholly different. Now the Fed is engaging in, effectively, mortgage lending. They're making home loans like the neighborhood bank, just a couple of steps removed but that's what they're doing.

That is completely outside the mission of the Fed and outside anything they have done in the last 100 years to be so successful. They are in part so successful b/c of their stability, and they are stable b/c they don't play the markets. They ARE the T-bill market, but they don't participate in the other markets or hold securities like stock in GM or home loans.

That's what makes them stable, and now since 2008 that's all gone. The Fed has never before involved itself in non-monetary policy. So your confidence in the Fed's history is exactly why you should be against this move, b/c it breaks with what has made it so successful for a century.

So this isn't an election thing. I'm deeply concerned that the Fed has moved beyond pure monetary policy on a few levels. First, that's not in their charter or mission which is an issue in itself as they are not elected. Next, it means the Fed has increased the areas in which it is potentially tied to and influenced by politicians. The whole mortgage mess was largely politically driven and I doubt they'll let up now that the Fed holds the notes instead of Fannie Mae.

Last, it makes the Fed as a banking entity exposed to the risk of the mortgage market just like Fannie Mae. if those securities go down in value then the Fed looks to Congress to a bailout I suppose, again a completely political mess.

This is the complete opposite of moving to a free market and allowing the markets to clear. These loans aren't worth what they were when they were made, and all of this is just ways to avoid the market clearing. GM should fail, the big investment banks that made these loans should fail, and the market should clear.

Further, to prevent more of it we need to re-establish the free market in housing, not further politicize it. This mess was created by political pressure to make home loans that should never have been made. Dodd in the Senate, Frank in the House, and a host of supporting special interest groups (which includes Obama directly since he sued to get sub-prime loans made in Chicago) pushed the banks to make these loans and Fannie and Freddie to back them. It is in their political interest for people to be able to buy homes, so they distort the market to get them in homes they can't afford in the long run.

The entire home mortgage market is a distortion created post WWII where the federal government backs home loans. That has made it a political process, which has led directly to the S&L and other bank failures in the 80s (The Keating Five is a good example) and now a complete mortgage system collapse that drug the entire economy with it.

So no, this isn't about not doing something good for the nation. This is about me thinking this is simply not good for the nation. Rather than fix the problem this is another sleight of hand that fixes nothing and now has put the entire monetary policy of the US at risk.

Being against something that looks good doesn't mean you have an ulterior motive. it could be that you simply don't think it is in fact good.

[Catfan73]

It sounds to me like they're just doing their job. What they do has never really followed any set of rules or limits, no matter who was in the White House. From the Federal Reserve website:

Mission

The Federal Reserve System is the central bank of the United States. It was founded by Congress in 1913 to provide the nation with a safer, more flexible, and more stable monetary and financial system. Over the years, its role in banking and the economy has expanded.
Today, the Federal Reserve's duties fall into four general areas:

conducting the nation's monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates
supervising and regulating banking institutions to ensure the safety and soundness of the nation's banking and financial system and to protect the credit rights of consumers
maintaining the stability of the financial system and containing systemic risk that may arise in financial markets
providing financial services to depository institutions, the U.S. government, and foreign official institutions, including playing a major role in operating the nation's payments system

[jazyd]

where does it say they are to buy mortgages, and raise inflation. The big thing in that whole paragraph, the bank has 'EXPANDED' their role just like the rest of government. And Bernie can say it isn't political all he wants, it is and it is a way for him to save his cush job as he will be rewarded with Obama and probably replaced with Romney.\\\

We must stop the expansion of government in every phase, it has proven it does not know what it is doing in economics



It sounds to me like they're just doing their job. What they do has never really followed any set of rules or limits, no matter who was in the White House. From the Federal Reserve website:

Mission

The Federal Reserve System is the central bank of the United States. It was founded by Congress in 1913 to provide the nation with a safer, more flexible, and more stable monetary and financial system. Over the years, its role in banking and the economy has expanded.
Today, the Federal Reserve's duties fall into four general areas:

conducting the nation's monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates
supervising and regulating banking institutions to ensure the safety and soundness of the nation's banking and financial system and to protect the credit rights of consumers
maintaining the stability of the financial system and containing systemic risk that may arise in financial markets
providing financial services to depository institutions, the U.S. government, and foreign official institutions, including playing a major role in operating the nation's payments system

[Catfan73]

They're supposed to do what they can to achieve the aforementioned goals. They're not always successful, and the Fed undoubtedly wields enough power to make a lot of people nervous, but along with the Supreme Court it's one of the few institutions we have that is expected to do their job no matter who gets upset with them.

[ukcatlvr]

Well after reading most of the previous stuff in each post I'll stick with my original plan. I'll vote Romney !!!!! Didn't vote for the Bad Guy last time nor this time.

[CitizenBBN]

They're supposed to do what they can to achieve the aforementioned goals.

No, they're supposed to do what they were chartered to do within the powers granted them. Their charter doesn't say "do whatever it takes". Are you really OK with saying a semi-autonomous government body should have any power it wants to achieve the goals it is supposed to achieve, and by the way they're the sole interpreter of whether it achieves those goals?

that's just plain scary to me.

So if the Supreme Court looked out and said "that looks unconstitutional, we're going to rule on it whether there is a case presented or not" You'd be OK with that? they're the guardians of the Constitution supposedly, but they are only set up to review court cases, not instigate decisions on their own. But if it's to fulfill their mission it's OK?

This nation exists, and Western culture in general has thrived, due to the rule of law. Not the rule of men, but of law. Allowing a Fed chairman, a man, to determine what policies to pursue without even the constraints of the law that empowered his position is dangerous and contrary to the entire Western legal system.

In this legal system it is possible for even a good idea to be stopped due to lack of legal standing for its implementation. It's the basis for the whole system that if it's such a good idea you go through the process of changing the law. No one has changed the Fed charter, yet they decide they can engage in stock market purchases?

If they decide some big company can't fail b/c it would hurt the economy they can buy up their stock even if Congress and the President don't issue a bailout? Can they take over management of that company to further the goals of a strong economy? Where does this line get drawn?


This also isn't a question of just wielding power. This is the Fed undermining its own ability to successfully achieve those goals in the long run by absorbing market instabilities and securities that could collapse in value. They have been immune from such movements since their creation. If we face another crisis they are now less stable financially to address it.

The Richmond Governor at the Fed has objected each time, and Philly's and Atlanta's Governors have also expressed concerns. That's quite unusual. They are worried about the Fed's long term stability since they are ingesting questionable assets and whether or not the policy even helps the economy.

So in my view:

1) The Fed has no authority to engage in direct market participation
2) It is dangerous to the long term ability of the Fed to do its job to engage directly in the market
3) They are absorbing assets that are risky
4) It's unclear there will be any benefit to the economy, and some evidence it will only continue to create/sustain the cycle of housing bubbles created by political pressure to get people homes who may not be able to afford them


Going back to the original point, this has nothing to do with Obama or not wanting things to improve before november. It's very unlikely this will make much difference at all, even more so that it will do it in 45 days. The problem is that the Fed is doing something without government oversight that it has never done before nor is authorized to do, which operates above market forces, exposing itself to risk and negating the rule of law.

It leaves in the hands of one man the ability to directly at a micro level influence the entire system of US markets, not just Federal bonds. It would be like the Supreme Court insisting that Congress submit laws for its review in case they're unconstitutional.

[jazyd]

Cat, you are smarter than this. What the fed is saying is the Obama economic pkg has failed, miserably and this will also. It will drive up inflation, ruin seniors quality of life for those that depend on interest rates for portion of their daily living expenses above the SS income. As I heard on TV this morning it is not going to help much to buy houses because banks can't loan like they would like because of the strangulation of regulations from Dodd'Frank, two wonderful liberals who screwed up so much in the banking and mort industry.

Until Reid gets off his butt and acts as a leader the budget does not get done, nothing happens from congress and as usual things are stangled. At least the house republicans passed a budget, but Reid won't let it even be debated or negotiated.



They're supposed to do what they can to achieve the aforementioned goals. They're not always successful, and the Fed undoubtedly wields enough power to make a lot of people nervous, but along with the Supreme Court it's one of the few institutions we have that is expected to do their job no matter who gets upset with them.